At the open: TSX rises as RBC leads financial gains after earnings

Traders work on the floor of the New York Stock Exchange (NYSE) in New York in this file photo.

BRENDAN MCDERMID/REUTERS

Reuters

August 23, 2017August 23, 2017

Canada's main stock index turned slightly higher in early trade on Wednesday, helped by gains in financial shares led by Royal Bank of Canada after the country's biggest lender reported a rise in third-quarter profit.

The Toronto Stock Exchange's S&P/TSX composite index was up 25.47 points, or 0.17 per cent, to 15,010.43 shortly after opening down.

U.S. stocks opened sharply lower on Wednesday, giving back some gains from a day earlier, after President Donald Trump warned of a government shutdown to build the Mexico border wall and also threatened to scrap a trade agreement with Mexico and Canada.

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"If we have to close down our government, we're building that wall," Trump said at a rally in Phoenix, Arizona on Tuesday evening.

The comments came as lawmakers face a late-September deadline to raise the U.S. debt ceiling or risk a default, and hours after a lawmaker said there was "zero chance" of the U.S. not raising the ceiling.

Trump also said he might scrap the North American Free Trade Agreement with Mexico and Canada to jumpstart negotiations. The first round of talks on Sunday, with the aim to revamp the NAFTA by early 2018.

Investors have grown increasingly concerned about Trump's ability to legislate his pro-growth agenda, especially those of tax cuts and infrastructure spending, given the near constant political rumblings in the White House.

"The pullback is from pretty strong words out of the president ... comments on NAFTA, which brings up a question of a global trade war, is weighing," said Peter Cardillo, chief market economist at First Standard Financial in New York.

"You can have a tax cut, but if you have a trade war, that is going to impact the economic growth," Cardillo said.

At 9:42 a.m. ET (1342 GMT), the Dow Jones Industrial Average was down 77.83 points, or 0.36 per cent, at 21,822.06 and the S&P 500 was down 8.3 points, or 0.34 per cent, at 2,444.21.

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The Nasdaq Composite was down 21.88 points, or 0.35 per cent, at 6,275.60.

Investors are also jittery ahead of the annual gathering of global central bankers in Jackson Hole, Wyoming, where Federal Reserve Chair Janet Yellen's Friday speech will be scrutinized for clues on the central bank's stand on monetary policy.

Nine of the 11 major S&P indexes were lower, with consumer discretionary index's 0.60 per cent fall leading the decliners.

Lowe's 4.7 per cent fall weighed the most on the S&P after the company reported a lower-than-expected profit and cut its margins forecast.

Bigger rival Home Depot dropped 1.34 per cent, weighing the most on the Dow.

Shares of advertising firm Omnicom dropped nearly 5 per cent, while Interpublic Group fell 4.3 per cent after WPP cut its sales forecast for the second time in 6 months. WPP'S U.S.-listed shares sank 11.2 per cent.

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Declining issues outnumbered advancers on the NYSE by 1,793 to 715. On the Nasdaq, 1,646 issues fell and 671 advanced.

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